Non-profit status used to be a tax designation whose value derived primarily from allowing an entity to offer tax-shielding receipts for donations. But in the online world, where companies can easily leverage armies of globally-dispersed workers to carry out small tasks in pursuit of a larger goal, non-profit status can become something greater: a source of competitive advantage.

The Curious Case of Wikipedia

Jimmy Wales and Larry Sanger initially launched Nupedia, an online encyclopedia written by experts, in 2000. Nupedia used a thorough peer-review editorial process designed to produce articles of a quality comparable to professional encyclopedias. By limiting the user base to only a select few experts and imposing upon them an extensive seven-step process, Nupedia was slow to grow.

Shortly after, Wales and Sanger were introduced to the concept of a wiki - a repository of information written, edited, and run by its users. The two decided to create Wikipedia in 2001 as a feeder to Nupedia.

Both were online web platforms, but whereas Nupedia was bureaucratic and run by an oligarchic community of the select few, Wikipedia was nimble, open, and democratic. Nupedia maintained traditional, old school ways of leveraging manpower. Wikipedia, by contrast, opened itself up and channelled the power of a much larger crowd in a rapid and efficient way.

The results were telling. Nupedia only posted 21 articles at the end of its first year; Wikipedia managed 200,000 in that same time period.

Moreover, the risk of the wiki approach - that of increased output coming at the expense of quality - turned out to be overstated. While some high-profile mistakes and vandalised articles grabbed headlines, a 2005 study by Nature, the weekly science journal, found Wikipedia to be as accurate as Encyclopedia Britannica.

An Army of Free Workers

Unsurprisingly, as Wikipedia has grown, its competitors have disappeared. Microsoft Encarta was discontinued in 2009. And after 244 years of producing the iconic volumes seen on shelves around the world, Encyclopaedia Britannica announced in 2012 that it was discontinuing its print edition. How do you sell something for hundreds when everyone has access to a competing product of similar quality that’s larger and totally free?

It’s worth delving into the fascinating dynamics of Wikipedia’s business model. Wikipedia is managed by the Wikimedia Foundation, a non-profit organisation. It’s highly unlikely that those volunteers would have dedicated millions of hours to writing and editing articles if they believed that instead of contributing to the utopian idea of a free encyclopedia for all, they were instead subsidising Wikipedia’s shareholders with free work en route to an eventual revenue model of selling ads or subscription fees.

User-generated content can make corporations rich, as Facebook, Twitter, Pinterest and others have shown, but posting selfies is more fun than editing encyclopedia articles. Wikipedia needed and found dedicated volunteers who were willing to contribute hours doing pro bono work that people used to be paid real money to carry out.

Expanding this Quest with the LearnCloud

The lesson leads to another question: how can we further use the crowd to promote good around the world? We think that by applying a similar approach we can build an online movement to revolutionise access to education around the world.

Like most people who are used to being online almost 24/7, the authors and readers of this article likely don’t think twice about looking things up on the internet whenever and wherever. Need to convert Celsius to Fahrenheit? There’s an app for that. Need to learn trigonometry? You can watch videos on Khan Academy.

But for too many children that’s not an option because they live in places where they can’t go online. These kids are usually the ones who would have the most to gain from access to this free content, but even if they had a suitable device and found an internet connection once a month, they wouldn’t know where to start. Where is the free content? Will it work on their mobile device? Can it be downloaded and used later on, when they’re offline?

To fill this need, Rumie, an organisation dedicated to delivering free digital education to the world’s underprivileged children, created the LearnCloud, which can be described as Pinterest for Free Educational Content. Just as Wikipedia leveraged the wisdom of crowds to produce the world’s largest free encyclopedia, the LearnCloud harnesses the world’s collective brainpower to find the best free educational content that will work straight out of the box without an Internet connection. No online registration. No downloading new chapters. No in-app purchases. It’s all free and works offline.

All of this information is accessible to anyone with a smartphone or tablet - whether one of Rumie’s own (now in six countries and expanding fast) or any other Android device (now spreading across emerging markets and expected to pass three billion worldwide by 2016). Need a free encyclopedia? It’s available. (Wikipedia, of course.) Webster’s Dictionary? It’s there. Word Games? Math Games? Textbooks? Instructional videos?

Naturally, sorting through everything available online and ferreting out the best free, mobile-friendly and offline-usable content would be a task that would take thousands and thousands of paid employees - a very expensive proposition.

But as we’ve seen already, in the Internet era a creative non-profit with a cool web platform and a utopian mission can often find a cheaper way to get things done.

Tariq Fancy (INSEAD MBA '08D) is the founder of Rumie.

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